Single Bottom Line Sustainability
The Arrogant, Hard Ball Greenie
Or is there really value in the soft stuff?

by Paul Gilding

Have I lost the plot?
Im asking myself if ExxonMobil can become a leader on sustainability.
Could they beat BP to become the greenest oil company? A contrarian
thought, to say the least.

It was a pair of recent conversations that sent me down this rabbit-hole.

The first was with a former ExxonMobil employee who wrote to me
after an earlier green@work column, challenging my questioning of
that companys commitment to environmental performancea
commitment he had found strong on the ground. However, he said he
had no quarrel if I wanted to challenge ExxonMobil on the
basis of corporate arrogance, hardball business tactics, or monopoly.
So that got me thinking: Can a company be an arrogant, hardball
greenie?

Soon after, an NGO campaigner asked, What would happen if
ExxonMobil applied its unquestionable focus and capacity for execution
to addressing climate change and promoting renewables? If the company
let go of its ideological baggage, it would probably leave the competition
for dead.

At this point the scenario started to get really interesting. Arrogant
hardball greenie whips the transparent and engaging competition.
Could it happen?

Next thing I knew, I was questioning some of my core assumptions.
Has the focus of the sustainability movement been too much on process
(e.g., stakeholder engagement) and public commitments (e.g., endorsing
principles and charters)? Has it not been enough on actual outcomes,
(e.g., technology that reduces environmental harm being widely sold
at the right price)?

This is an important question. Of course no amount of good process
will make up for not having the right solutions at the right price.
But do we really need both or is the latter sufficient? A great
deal of energy is put into process and culture, and the question
must be asked: Is there really value there for business?

The culturally-driven approach to change holds that
skills and attitudes like openness to new ideas, transparency with
stakeholders, and the ability to effectively engage and build support
in the community are critical to success. Down in the rabbit-hole,
I was wondering if the culturally driven approach to
sustainability might be overdone. Maybe we can get through the sustainability
rapids using technology-driven change as our main strategy? Might
ExxonMobil, perish the thought, be a company worth emulating?

Its not easy letting go of one of your prime villains, even
if its only in a thought experiment. But thats what
I did when I pitted ExxonMobil, the technology-driven
change company, against BP, which, while a very strong technology
company and very much performance-focused, is also a cutting-edge
example of the culturally-driven approach.

In the view of most corporate sustainability specialists, ExxonMobil
has a self-defeating strategy and BP an enlightened one. But is
this conventional wisdom correct? After a fair amount of time down
the rabbit-hole pondering the challenge, I decided that it was.
Heres why.

Theres no doubting that ExxonMobil has done well for shareholders
. . . so far. Its do it our way or do it elsewhere management
style gets results. But the company is going to rapidly lose competitive
advantage from here on in if it keeps to this approach. The world
really is changing. People want to work for a company they respect.
In the emerging, more complicated energy economy, effective partnerships
and community support will be key to business success. A companys
reputation and ability to connect to societys deeper values
is no longer a soft issue. The ugly fate of Monsanto,
which had great technology (in their customers view), but
lousy understanding of societys values, is a reminder of that.
It destroyed billions of dollars of value.

Increasingly, technological strength is merely the entry price for
global companies. The real contest is going to be among a small
number of very large global players vying to be the company
of choicethe employer of choice, the developer of choice,
the supplier of choice and the alliance partner of choice. Companies
that dont adapt will lose competitive advantage, ironically
because of the very same factors that enabled them to succeed so
farnarrow focus, closed shop and disciplined command and control.
Its an open world, and youve got to be an open company
to play in it. Thats true today and it will be more so tomorrow.

Maybe BP doesnt stand for Beyond Petroleum, as
the company claims. Maybe it stands for BoundariesPorous!
Thats what will make BP a winner in the years ahead. Ability
to predict, and agility to move with, a rapidly moving market context.

And the lack of those same porous boundaries is what will do ExxonMobil
in.

Paul Gilding (paul.gild ing@ecoscorp.com) is the founder and CEO
of Ecos Corporation, which provides strategic advice to corporations
on how to create value through sustainability.